Repossessing a property with commercial tenants has different rules when compared to the eviction process used for tenants of residential or mixed purpose buildings. You should also keep in mind that the process to repossess a commercial or mixed-use property is often longer than that required for a property that is only residential in nature.
The main reason for which the process of evicting a business from your property is a lengthy one is often related to the unwillingness of the tenant to leave the property. Another reason may be that the two parties are not able to agree on the terms of a new lease. No matter the case, the dispute is ultimately a matter to be resolved in court.
How do I end a commercial tenancy?
The most common reason to want to evict commercial tenants is failure to pay rent. Luckily there is an eviction method that has been designed for this situation.
Forfeiture of lease is often the best and quickest way to evict a business from your property. The landlord is entitled to forfeit the lease only if the tenant has been in breach of the contract i.e. non-payment of rent. The lease also needs to give the right to forfeit when a particular breach occurs, it must also state the length of time rent must go unpaid before forfeiture can occur. In the majority of cases, this will be between 14 and 21 days.
In the situation the tenant cannot or fails to remedy the breach and compensate the landlord within a specified and reasonable period of time, then you are entitled to re-enter the property either peacefully or by court proceedings.
Some of the breaches that cannot be remedied by the tenant include the illegal or immoral use of the building because this leaves the reputation of the landlord damaged and can only be remedied by the tenant vacating the property, and the breach of covenant against assigning and underletting.
Is forfeiture the best option?
It is worth considering other options you have for dealing with the non-payment of rent by your commercial tenant. If you simply wish to be rid of the tenant and have the ability to rent out your property again then forfeiture will be the best option. However, if you wish to reclaim the rent in arrears then it is best to use Commercial Rent Arrear Recovery.
Commercial Rent Arrears Recovery, otherwise known as CRAR means that landlords can recover monies owed from commercial tenants. This is done by instructing certificated enforcement officers to take control of goods belonging to the tenant so they can be sold at auction.
For CRAR to take place, there must be a written lease that has not ended (the reason you cannot use forfeiture and then CRAR), and the landlord must only be seeking to recover rent that is outstanding. This procedure can also not be used for mixed-use properties, for example, a pub with a flat above.
Once the rent is at minimum seven days overdue, instructed enforcement officers can attend to attempt to recover rent from the tenant. Clearly, the first priority is to recover the total sum owed however if the tenant cannot pay in full and instead wishes to pay in instalments then they can enter into a controlled goods agreement to facilitate that.
For more information and to instruct our certificated enforcement officers to forfeit a lease or carry out the CRAR process get in touch by calling 0345 366 0000 or fill out our contact form and we will reply as soon as we are able.